Tax return - payments on account?

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Hi,

Could anyone tell me what happens with payments on account if you know you're likely to earn below the tax threshold next year? I'm planning on going from self-employed to employed.

Thanks

You can make a claim to reduce your payments on account via the self assessment portal or a paper form called SA303.

You should be aware that HMRC is permitted to claim interest on payments on account that are too low, so if you reduce them and then continue being self-employed it could backfire. The best thing (maybe) to do is to wait until you have certainty as to your situation.

Ah I see, thank you! So am I right in saying that the only tax I must pay is the 'total amount due for 2022-2023' (I'm filing this year's return early), and that the first payment and second payment are simply voluntary contributions towards next year's tax return?